Appeal to review Massmart-Walmart merger ‘unsubstantiated’

2011-10-20 11:03

An appeal for a review of the merger between US retail giant Walmart and local company Massmart was unsubstantiated, the Competition Appeal Court in Cape Town heard today.

“We submit that the review application is factually unsubstantiated and legally misconceived,” said counsel for the merged firm.

Jeremy Gauntlett and David Unterhalter added in a submission to the Competition Appeal Court: “We therefore submit that the review application ought to be dismissed with costs.”

The appeal was brought by the government.

Dozens of anti-Walmart protesters demonstrated outside the Cape High Court as the hearing got under way, their singing audible in the court’s corridors.

“Walmart is going to cost us thousands of jobs. We can’t allow them to come in,” said one of the protesters, who was wearing a Coalition Against Walmart T-shirt.

The appeal is being heard by a panel of three judges, headed by Judge Dennis Davis.

Wim Trengove is arguing on behalf of the departments of agriculture, forestry and fisheries; economic development; and trade and industry.

The appeal is expected to last for two days, but Monday has also been set aside in case the hearing extends longer than expected.
Earlier this month, the four departments filed their heads of argument.

They argued that Walmart’s acquisition of Massmart could have a “potentially devastating” effect on local jobs.

They wanted the transaction to be sent back to the Competition Tribunal for proper consideration and for more effective conditions to be imposed.

The government has argued that the merging parties will increase imports, relying on Walmart’s vast and extensive international procurement capability.

Economic Development Minister Ebrahim Patel raised concern that tens of thousands of jobs could be lost in the local factories supplying Massmart and other local retailers.

Trade and Industry Minister Rob Davies said there was no evidence that Massmart would create 15 000 jobs because of the merger, as it had advertised.

Agriculture Minister Tina Joemat-Pettersson said the implications of a displacement of local suppliers by Massmart would result in lost income and most likely the loss of jobs. 

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